Chevron to rebuild Ike-destroyed TEL Offshore site

By IBT Staff Reporter On 10/06/09 AT 3:41 PM

SAN FRANCISCO - Chevron Corp will redevelop platforms and wells at Hurricane Ike-destroyed Eugene Island 339, according to a filing on Tuesday, in a boost to the Chevron-managed TEL Offshore Trust Partnership.

Eugene Island 339 in the Gulf of Mexico accounted for nearly half of the trust's production, which totaled more than 200,000 barrels of oil equivalent in the third quarter of 2008, when Hurricane Ike hit. The site also accounted for a third of the trust's estimated future net revenues.

TEL Offshore said last month it would not make a third-quarter distribution to unitholders.

According to the filing with the U.S Securities and Exchange Commission, the first phase of rebuilding is due to start early next year and production would restart by October 2012.

The costs for such a redevelopment would be significant, the filing said, without giving further details. While Chevron has stated that it intends to pursue such a redevelopment, there is no obligation for Chevron to continue to pursue such redevelopment. (Reporting by Braden Reddall, editing by Leslie Gevirtz)